A Fixed-Step Stop-and-Reverse Trend Indicator

Summary

The document presents a trend-following indicator similar in purpose to Supertrend, but its trailing reversal level is set using a fixed percentage-like step from the close rather than a multiple of average true range. The level adjusts with the direction and position of recent closes relative to the prior level. When price crosses the level, the indicator plots an up or down arrow; an option controls whether the trend line is displayed.

The user must choose the step size to suit the instrument and chart timeframe. The document provides implementation code but no backtest, performance evidence, or guidance for selecting that parameter. Because the distance does not adapt to changing volatility, a fixed setting can behave differently across instruments and market regimes. The signals therefore describe a chart rule, not a demonstrated profitable strategy, and require testing before being used for trading decisions.

Key ideas

• The indicator sets a reversal level using a fixed step from price rather than an ATR multiple.
• The trailing level updates according to recent closes and its prior value.
• Crossings of the level trigger directional arrows, and the line display can be toggled.
• The step size should be adapted to the instrument and timeframe.
• No empirical results are provided, and the fixed distance does not adjust to volatility changes.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.